Mr . X started to invest through SIP in two proven equity diversified funds last June. He started of with a aim to keep investing for five years. ( a very good long term plan indeed). He was an happy man till Jan'08, as he was seeing his funds growing. Now after the downward run in the stock market, he is thinking whether he should discontinue his SIP. He is not happy because his portfolio has moved into negative territory.

Mr. X should actually be happy for the fall now because he is able to get more units at these lower prices. Instead of stopping- a better strategy would be increase the SIP , if possible. The amount you SIP in equity MF during bearish phases would yield more returns when the market turns around.

The economy has been in the path of explosive growth in the last couple of years. Pay packets for all the levels have increased considerably in the past few years.( esp. in the private sector). Although there are a lot of uncertainties in the macro economic environment, there is a lot of room for growth in the long run. Prudent investors have managed to generate a lot of wealth in this period.

There are a some people , who are on a P2P survival mode even though their income/salaries have increased substantially during the years.

Pay check to paycheck survival ( P2P) is a really dangerous habit. Spending all you earn and taking loans that cause a huge burden are really bad financial habits. I know a couple of people who earn 6 digit figures per month, but can't manage even if they don't get their next month's salary. P2p survival (without even planning for contingencies )can be really dangerous.

Saving and investing at least for contingencies is the first step that one needs to take in the journey of financial independence. So, if you are on a P2P survival mode, TODAY is the best day to start saving (...and investing).